What’s the best way to grow your money?
Some say it’s by saving even more. Others insist that investing is the way to go.
Our answer: it’s a smart combination of both these strategies. You can’t really do sustainable investing for yourself unless you’re using the money you’ve saved. And unless you’re investing the money you have saved, its value will get wiped out by inflation in the long term.
Read more about Business
But how do you even begin?
This article lays out simple steps to growing your money. There’s no technical stuff here. Just plain, practical moves you can make to increase both your cash holdings and overall financial worth.
Here’s how to go about it.
- Set a Goal
The first thing you want to do is set a goal. How much money would you like to get from what you have now? Why do you want more money? How much can you realistically gain?
You can aim high, but you don’t want to set illusory targets. And unless you have a clear reason for wanting to grow your money, you’ll struggle to visualize the endpoint of your pursuit—something you’ll need to do to stay focused on your aim.
Also, think about when you want to attain that goal. Again, you should have a feasible time frame within which you can get it done.
- Know What Your Monthly Income and Expenses Are
If you know what your average monthly income and expenses are, you will be able to tell what your minimum potential savings are for each month. That’s the money you want to grow.
When you know how much you have left (if you do have anything left), you will know how much effort you will need to put in to get it to the point you’re aiming at.
- Track and Cut Your Expenses
Examine your monthly spending. Are there things you can do without?
Identify the excesses in your day-to-day spending, and trim them. They may seem small or insignificant, but these things may be accumulating to form a big drain on your resources.
The best way to do this is to track your expenses. Record your daily spending, and review at the end of each month. Over time, you will get a broad view of what’s receiving your money. You may be surprised at what you find—and what you can forego!
- Increase Your Savings
Track your savings just as you monitor your expenses. They should benefit from the excesses you eliminate. If you haven’t been saving prior to this, your cost-cutting exercise could free up something you can stash away.
Find our comprehensive listings of businesses in Nigeria here https://businesses.connectnigeria.com/
Also save some of the extra money you receive from other sources, like gifts and donations.
- Invest Your Savings
You don’t have to be a rich person to invest in things. There are several inexpensive ways to grow the money you have saved up. You could put them into a profitable small scale business, like these ones you could start for less than ₦100,000, or something bigger, depending on how much money is available.
Some investments are passive; you don’t have to work regularly (or at all) to earn from them. For a list of these ideas, read our article, 10 Passive Income Ideas for Nigerians Today.
- Pay off Your Debts
Debts can be a hindrance to growing your money sustainably. So you should consider paying them off. Begin with the ones that accrue (high) interest, and work your way to the low interest or no-interest ones.
The less debt you have to pay, the greater your net financial worth will be.
- Reinvest Your Returns
If you want to continually grow your money, you will have to reinvest the returns you make on your investment. It’s up to you to decide how much you plough back. Just be sure that it’s in line with your goal.
Keep the investment cycles going, and in time, you’ll see your earnings compound into something big.
Featured Image Source: Money Under 30
Got a suggestion? Contact us: editor at connectnigeria dot com